Google promises to turn your phone into a wallet

Google unveiled their new Google Wallet smartphone app Thursday, introducing technology that will let consumers tap their phones to pay for goods at selected merchants. Wallet uses technology known as near field communications, or NFC, which has been hyped heavily over the past year but is still a couple years away from being included in most new smartphones.

When it launches (“soon,” Google says), the app will work with a single phone: the Nexus S 4G on Sprint. To set up payments you’ll need a Citi MasterCard, or a you can put money onto a Google Prepaid Card from another payment card.

When the system launches, you can tap to pay wherever MasterCard’s PayPass is accepted. San Francisco is among the launch cities, and a fair number of merchants will be Wallet-compatible. CVS, Jack in the Box and Sports Authority are among the merchants already using PayPass.

Plenty of skepticism remains about NFC payments — is it really any easier to tap a phone than swipe a debit card? Other start-ups in the payments space have rejected it as a technology in search of a problem.

But Google says Wallet is the beginning of a new generation of point-of-sale systems. It will integrate with Google’s Groupon-like Offers service, and will be able to store loyalty cards and gift cards as well. Eventually the company imagines receipts, boarding passes and tickets all being synced to the virtual wallet.